Boosted entirely by its insurance and mortgage operations, General Motors (NYSE:GM) reported Q3 EPS of $0.79, versus a $1.42 loss a year ago. Sales climbed 5.4% to $4.5 billion.

GM's financing unit, General Motors Acceptance Corporation, boasted a 32% profit gain, with mortgages contributing $253 million; insurance, $57 million; and automotive financing, $320 million.

On the auto manufacturing side, however, global auto profits came in at a scant $34 million. The company offered $4,219 in incentives, reportedly $1,700 ahead of Toyota and slightly behind Ford (NYSE:F), destroying margins. Car and truck earnings crashed 91%.

And those pesky pension liabilities -- a $25 billion deficit at the end of 2002 that doesn't appear on the balance sheet? Bill Mann has clearly explained these perils -- including the company's world record $13 billion debt issuance, in large part to fund pension liabilities. GM said it added $13.5 billion to its pension fund this month and last and will deposit another $4 billion to $6 billion from the coming sale of its Hughes Electronics unit.

Like General Electric (NYSE:GE) with its GE Capital financing arm, GM depends on financial products to stay afloat. But unlike GE, which has a few other significant operations such as medical equipment, GM just has cars and trucks. And everyone's bought new ones.

Yup, the auto makers worldwide insist on being crash-test dummies, barreling along with competitive incentives that reduce margins and lead to ruin. It seems inescapable that GM will someday run out of sources of cash and into slackening demand, and then it will have no choice but to slash or eliminate its dividend. It is the only thing supporting the stock, up 68% from its March 52-week low of $29.75.

Is there hope? Join in on our General Motors discussion board .

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